Your data is worth billions. Can Newsom make tech giants like Facebook and Google pay up?

In this Tuesday, Feb. 12, 2019 photo, California Gov. Gavin Newsom receives applause after delivering his first state of the state address to a joint session of the legislature at the Capitol in Sacramento, Calif. Newsom said the state’s consumers should get a “data dividend” from technology companies, like Google and Facebook, who are make by capitalizing on the personal data they collect. (AP Photo/Rich Pedroncelli)
Rich Pedroncelli
AP

Jaron Lanier thinks you need to get paid. Specifically, he thinks massive tech companies like Amazon, Facebook and Google – which make billions of dollars by selling information they collect from you – should cut you in on the deal.

Lanier – a computer scientist and Silicon Valley insider who pioneered the field of virtual reality – raised the idea of making tech companies pay people for their data in his 2013 book, “Who Owns the Future?” Gov. Gavin Newsom announced plans to pursue such an idea, which he calls a “data dividend,” in his State of the State speech.

“California’s consumers should also be able to share in the wealth that is created from their data,” Newsom said. “I’ve asked my team to develop a proposal for a new Data Dividend for Californians, because we recognize that your data has value and it belongs to you.”

With these two short sentences toward the end of his speech, Newsom signaled his embrace of a revolutionary idea. The data dividend has the potential to completely shift the way we think about technology, data, individual rights and economic power in the 21st century.

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“[Google parent company] Alphabet shares gave up some gains in New York trading, while Facebook turned negative, following Newsom’s comments,” reported Bloomberg News, suggesting Newsom’s words may have spooked the titanic tech companies.

For example, we tend to think of social media as “free,” but it’s not. The apps and websites we use to stay connected with friends, family and news are basically huge nets designed to collect as much information as possible about our wants and needs.

“Algorithms gorge on data about you, every second,” writes Lanier. “What kinds of links do you click on? What videos do you watch all the way through? How quickly are you moving from one thing to the next? Where are you when you do these things?”

A data dividend could disrupt this status quo. It has the potential to:

▪ Empower citizens and consumers by highlighting the role they play in tech wealth generation. Since search engines and social media apps need our data to make money, we have tremendous power, but only if we realize it.

▪ Create new forms of income and work in a world where data is king. In a future world where robots replace workers, how do people make a living? “Does this end up as a world with a few billionaires where everyone else is having their data stolen and being kept alive to provide data to robots? It’s a stupid destination,” said Lanier.

▪ Raise public awareness about what technology is doing to our lives and our society. Lanier, who sold one of his startups to Google, uses terms like “behavior modification,” “surveillance” and “addiction” to describe Silicon Valley’s business model. He says tech companies keep us hooked and make us unhappy in order to milk as much data as possible.

What might a data dividend look like?

Facebook co-founder Chris Hughes thinks Alaska may provide a model. In an essay published in the Guardian newspaper last year, Hughes highlighted Alaska’s Permanent Fund, which gives all residents a share of wealth generated by the state’s oil industry.

“Oil companies pay a significant portion of their gross revenues to the state, and a portion of that money is earmarked to fund a savings account for the people,” wrote Hughes. “Today, that savings account distributes 2.5% of its total value every year, split evenly between every resident of the state of Alaska. This amounts to about $1,500 a year per person, or $6,000 for a family of four.”

But Alaska has lots of oil and few people. Some suggest the value of an individual person’s data is meager in comparison. It’s not clear whether Newsom might seek direct payments to individuals or establish a pot of government funds he could use for things like single-payer health care and free college.

Lanier, the data dividend’s most vocal champion, has been “seated at the same table” with Newsom on one occasion and has been told his book is “on people’s desks.” His preferred version would give every person a long-term financial stake in their own data “contributions.”

“What I hope is that the language of the final bill will be more about individuals being empowered as first-class citizens rather than a tax that’s one-size-fits-all,” said Lanier. “It should be about individuals getting their payment and making their choices.”

He envisions a system in which people would receive “equity” or “royalties” for their data, depicting any future without such an arrangement as bleak.

“We either need to nationalize Google and Facebook, or we need to pay people for their data,” he said. “Anything less will lead to an incredibly dangerous and unstable society.”

Gov. Newsom campaigned on boldness, courage and change. The data dividend will take him into uncharted territory and fierce conflict with the wealthiest corporations in the world. But if Lanier is right, it may be the only path to a sustainable economic future for us all.